[dineshreddy344]

What is the entry for discount allowed

[eelyram]

Is the discount allowed to be in the profit and loss statement?

[pready]

It depends on when the sales discount is taken.

For example if a customer purchases something on credit, then pays within the discount period the journal entry will be:
Debit cash for the amount of cash
Debit Sales discount for the difference
Credit Accounts Receivable for the amount the customer owes

For an example if a customer purchases $100 of goods on credit and there is a discount of $10 if the bill is paid within 15 days, the journal entry will be:
Debit Cash for $90
Debit Sales Discount for $10
Credit Accounts Receivable for $100

On a Multi-Step Income statement Sales discount will be listed after gross sales.

First will be Gross Sales, then Sales discounts and Sales Returns & Allowances will be listed, which will reduce gross sales to get to Net Sales.

[jondough]

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